Not applicable.
| Item 6. | Indemnification of Directors and Officers. |
ChoiceOne’s Restated Articles of Incorporation
require it to indemnify directors and executive officers of ChoiceOne to the fullest extent now or in the future permitted by the Michigan
Business Corporation Act (the “MBCA”) in connection with any actual or threatened civil, criminal, administrative or investigative
action, suit or proceeding (whether brought by or in the name of ChoiceOne, a subsidiary or otherwise) arising out of his or her service
to ChoiceOne, a subsidiary or to another organization at the request of ChoiceOne or a subsidiary. In addition, ChoiceOne’s Restated
Articles of Incorporation permit it to indemnify persons who are not directors or executive officers of ChoiceOne to the extent authorized
by its Bylaws, resolution of the Board of Directors or contractual agreement authorized by the Board of Directors.
ChoiceOne’s Bylaws permit ChoiceOne to indemnify
any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding
(other than an action by or in the right of ChoiceOne), whether civil, criminal, administrative, or investigative and whether formal or
informal, by reason of the fact that the person is or was a director, officer, employee, or agent of ChoiceOne or is or was serving at
the request of ChoiceOne as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, or other enterprise, whether for profit
or not for profit, against expenses (including attorney fees), judgments,
penalties, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit,
or proceeding if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests
of ChoiceOne or its shareholders and, with respect to a criminal action or proceeding, the person had no reasonable cause to believe his
or her conduct was unlawful.
ChoiceOne’s Bylaws further permit ChoiceOne to
indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit
by or in the right of ChoiceOne to procure a judgment in its favor by reason of the fact that the person is or was a director, officer,
employee, or agent of ChoiceOne or is or was serving at the request of ChoiceOne as a director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, whether for profit or not for
profit, against expenses (including attorney fees) and amounts paid in settlement actually and reasonably incurred by the person in connection
with the action or suit, if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the
best interests of ChoiceOne or its shareholders. However, ChoiceOne’s Bylaws provide that such indemnification shall not be made
for a claim, issue, or matter in which the person shall have been found liable to ChoiceOne except to the extent authorized by statute.
In addition, ChoiceOne’s ability to indemnify
its directors and officers or other persons is determined, to an extent, by the MBCA. The following is a summary of the applicable provisions
of the MBCA:
Sections 561 through 571 of the MBCA contain provisions
governing the indemnification of directors and officers by Michigan corporations. That statute provides that a corporation has the power
to indemnify a person who was or is a party or is threatened to be made a party to a threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (other than an action by or in the
right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses (including attorneys’
fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the
action, suit or proceeding, if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation or its shareholders, and with respect to a criminal action or proceeding, if the person had no reasonable
cause to believe his or her conduct was unlawful. The termination of an action, suit or proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not
act in good faith and in a manner that he or she reasonably believed to be in or not opposed to the best interests of the corporation
or its shareholders, and, with respect to a criminal action or proceeding, had reasonable cause to believe that his or her conduct was
unlawful.
Indemnification of expenses (including attorneys’
fees) and amounts paid in settlement is permitted in derivative actions, except that indemnification is not allowed for any claim, issue
or matter in which such person has been found liable to the corporation unless and to the extent that a court decides indemnification
is proper. To the extent that a director or officer has been successful on the merits or otherwise in defense of an action, suit or proceeding,
or in defense of a claim, issue or matter in the action, suit or proceeding, the corporation shall indemnify him or her against actual
and reasonable expenses (including attorneys’ fees) incurred by him or her in connection with the action, suit or proceeding, and
any action, suit or proceeding brought to enforce the mandatory indemnification provided under the MBCA. The MBCA permits partial indemnification
for a portion of expenses (including reasonable attorneys’ fees), judgments, penalties, fines and amounts paid in settlement to
the extent the person is entitled to indemnification for less than the total amount.
A determination that the person to be indemnified meets
the applicable standard of conduct and an evaluation of the reasonableness of the expenses incurred and amounts paid in settlement shall
be made: (i) by a majority vote of a quorum of the board of directors who were not parties or threatened to be made parties to the action,
suit or proceeding; (ii) if a quorum cannot be so obtained, by a majority vote of a committee of not less than two directors who are not,
at the time, parties or threatened to be made parties to the action, suit or proceeding; (iii) in a written opinion by independent legal
counsel; (iv) by all independent directors not parties or threatened to be made parties to the action, suit or proceeding; or (v) by the
shareholders (excluding shares held by interested directors, officers, employees or agents). An authorization for payment of indemnification
may be made by: (a) the board of directors by (i) a majority vote of 2 or more directors who are not parties or threatened to be made
parties to the action, suit or proceeding, (ii) a majority vote of a committee of 2 or more directors who are not parties or threatened
to be made parties to the action, suit or proceeding, (iii) a majority vote of 1 or more “independent directors” who are not
parties or threatened to be made parties to the action, suit or proceeding, or (iv) if the corporation lacks the appropriate persons for
alternatives (i) through (iii), by a majority vote of the entire board of directors; or (b) the shareholders (excluding shares held by
interested directors, officers, employees or agents). Under the MBCA, ChoiceOne may indemnify a director without a determination that
the director has met the applicable standard of conduct unless the director received a financial benefit to which he or she was not entitled,
intentionally
inflicted harm on the corporation or its shareholders, violated Section 551 of the MBCA (which prohibits certain dividends,
distributions and loans to insiders of the corporation), or intentionally committed a criminal act. A director may file for a court determination
of the propriety of indemnification in any of the situations set forth in the preceding sentence.
In certain circumstances, the MBCA further permits
advances to cover such expenses before a final disposition of the proceeding, upon receipt of an undertaking, which need not be secured
and which may be accepted without reference to the financial ability of the person to make repayment, by or on behalf of the director,
officer, employee or agent to repay such amounts if it shall ultimately be determined that he or she has not met the applicable standard
of conduct. If a provision in the articles of incorporation or bylaws, a resolution of the board or shareholders, or an agreement makes
indemnification mandatory, then the advancement of expenses is also mandatory, unless the provision, resolution or agreement specifically
provides otherwise.
The indemnification provisions of the MBCA are not
exclusive of the rights to indemnification under a corporation’s articles of incorporation or bylaws or by agreement. However, the
total amount of expenses advanced or indemnified from all sources combined may not exceed the amount of actual expenses incurred by the
person seeking indemnification or advancement of expenses. The indemnification provided for under the MBCA continues as to a person who
ceases to be a director, officer, employee or agent.
The MBCA permits ChoiceOne to purchase insurance on
behalf of its directors, officers, employees and agents against liabilities arising out of their positions with ChoiceOne, whether or
not such liabilities would be within the above indemnification provisions. Pursuant to this authority, ChoiceOne maintains such insurance
on behalf of its directors, officers and employees.